Buying a home is one the largest financial decisions many Australians will make in their lifetime and the fact that now a whopping 7 out of 10 people choose to trust the expert advice of a mortgage broker is telling of the industry and the trust it has created within the Aussie market. According to CoreLogic, Mortgage brokers facilitated 71.7 per cent of all new residential home loans between July and September 2022!
So, what is a mortgage broker and how can their services help you when securing a home loan?
We break it down…
What is a Mortgage Broker?
A Mortgage Broker acts an intermediary between a borrower and a lender, negotiating the loan on your behalf and helping you to find the right home loan for your needs.
Whether you’re just starting out buying your first home, upgrading to a new home, refinancing or building an investment portfolio, meeting with a Mortgage Broker can take the stress out of determining a suitable loan product to match your financial goals including;
How much does a Mortgage Broker cost?
- First Home Buyer loans with low deposits;
- Construction loans;
- Investment loans;
- Home to Home finance (also known as Bridging Loans);
- Low Doc Loans for self-employed clients;
- Debt Consolidation Loans;
- Loans for clients with impaired credit history;
- Australians living overseas and Non-Resident loans; and
- Non-conforming loans for borrowers with unusual circumstances, including adverse credit history.
Many people are unaware that most mortgage brokers do not charge a fee. Rather, they are paid a commission from the financial institution with which finance is eventually sought. Brokers, using specifically tailored mortgage comparison software, are able to show applicants first hand the different loan types available, the various interest rates on offer, lenders fees and other important features for comparison such as offset accounts and re-draw facilities. The broker acts, as more of a guide throughout the process, however ultimately it is the applicant’s decision on who to pursue finance with.
Why choose to go through a mortgage broker?
Researching loan types and lender policies can be a long and often overwhelming process, especially if you are a first time applicant. A mortgage broker can help save you hours of work by providing up to date industry knowledge and offering best practice advice.
Picking the right mortgage for your situation is crucial. A mortgage broker will generally have access to multiple lenders, of which, some may suit the applicants more or less, based on their current financial situation. Any recommendation made to the applicants will be made based upon the information provided, and on behalf of the lender with whom the mortgage broker feels offers the best chance of a successful application. In addition, brokers are up to date with industry changes, including policy and Government assistance.
Having your application denied is a possibility. However, unlike the banks, a broker will take the time to get to know you and to understand your current financial situation. A good broker will gather as much information about your finances as they can; in order to ensure that you meet the selection criteria nominated lenders are looking for. The broker will, more often than not, be able to predict the likelihood of an application’s success, prior to its submission.
- Mortgage brokers work for “you”.
Their industry knowledge can save you time and money and make the finance process almost stress-free. The personalised service can give you the peace of mind that the choice you are making is the right one for you and with hundreds of companies in Australia, buyers have an oasis of choice.
How do I prepare before meeting a Mortgage Broker?
Here are a few must-have for your meeting!
- Personal ID (100 points)
- Proof of income (2 latest payslips)
- Evidence of savings
- Details of financial commitments (personal loans, direct debits, insurances)
- General costs (fuel, groceries, subscriptions)